On Thu, 18 Jan 2007, Ryan Waite wrote:
> I know some of you aren't, um, tolerant of Microsoft for various reasons
> but I thought I'd clear up a couple errors in some of the posts. If you
> hate Microsoft at least you now have an email address for when you're
> feeling grumpy.
I don't feel grumpy (I've had my coffee:-) about Microsoft, nor do I
hate it.
If anything, I fear it. And so should you, even as you work for it.
Never in the history of the world has a single company achieved the
level of single-market dominance that Microsoft now has. Even AT&T at
its peak didn't dominate the WORLD market, and it was a government
regulated monopoly (indeed, it could not have come into existence
without the active help of the government, which more or less
deliberately decided to give it exclusivity in the market in exchange
for accepting government regulation and price control). J.D.
Rockefeller was a piker, Vanderbilt a wimp in comparison. Only Ford,
perhaps, enjoyed a similar period of global dominance but then, no,
probably not, as global markets didn't really exist until after he had
competition.
Microsoft, on the other hand, is for all practical purposes completely
unregulated, it faces no serious competition, it routinely engages in
business practices that make it very difficult for serious competition
to ever arise, and it extends all over the world, not just in the United
States. It has long since surpassed critical mass. It has demonstrated
conclusively that it is invulnerable to antitrust suits -- it can
cheerfully spend more money defending against them than it stands to
lose, and can stand to lose a billion dollars, and still come out
unimaginably ahead. After all, its opponents also have to match it
dollar for dollar and politically breaking it up is not an option even
if it is the "obvious" thing to do.
Microsoft has exploited its position to achieve the unthinkable -- it
has become a globe-spanning "hydraulic empire" (water monopoly), the
strongest kind of monopoly there is and one where it has virtually NO
competition and where by virtue of its position it can ensure that NO
competition has any sort of realistic chance to emerge.
This is more than an analogy -- its practices fit this historical model
better, in many ways, than e.g the Chinese empires that were one of
Wittfogel's original examples. By controlling the basic operating
system (the "water") it has asserted a level of control over the mass
software market for PCs that vastly exceeds any reasonable definition of
a "trust". Basically, it does whatever it likes in this market, in such
a way that it literally cannot be opposed. Time and again, when a new
software market has developed in the past, when an entrepreneur has come
up with a good idea and at risk of personal fortune and time created a
new software product, Microsoft has simply written their own version of
the product, shifted the access of their competitor to the "water" of
the operating system to create problems that they (Microsoft) are able
to avoid, and behold! The emperor's troops remain healthy and strong
while those of the upstart warlords are thin and emaciated without the
water to grow rice! They have then proceeded to take as much of the
market as they liked. Where is Borland today? Lotus? Corel?
Netscape? Even Apple exists to some extent because Microsoft "needs" a
visible "competitor" lest our government be forced to actually
acknowledge the obvious truth. OS2 was the last viable candidate for a
competitor, and if it had won IT would doubtless have become the
hydraulic empire and we'd all be railing against IBM.
I could go on (and have gone on in this and other forums in the past:-).
Adam Smith's invisible hand relies on the POSSIBILITY of nucleation and
growth of real competition, but the wonderful (from Microsoft's point of
view) thing about hydraulic empires is that they historically never fall
from within, and even when conquered from without their replacement
starts to "look like" the conquered bureaucracy -- the temptation to
exert abolute control by controlling access to water is just too strong.
Only forces from outside -- foreign barbarian invaders -- tend to be
able to bring about real change.
So when netscape emerges as a viable competitor in one small part of the
Empire -- sorry, no water for you. Your product will not work, our
competing product cannot be removed and does. Java? A clear threat, as
it enables the development of software that does not rely on our supply
of water -- suborn it and insert our own insidious code base to ensure
that future programs written to use it require water from our carefully
controlled and expensive wells. Make sure that our customers know that
glacial ice melt water provided by penguins, however clear and cold and
free of access, is of limited supply and contains giardia, cholera,
amoebic dysentary and possibly traces of mercury and radioactive
compounds because penguins have unclean habits and never wipe their feet
and should NEVER be used to make java. We (Microsoft) cannot lose,
because somewhere between 90% and 95% of all desktops already run our
flavor of water (and the exceptions are pretty much confined to graphics
arts workstations or geek machines, both ignorable markets that we still
dominate anyway) and will hence inherit our flavor of Java. Business
developers who choose to fight the trend will simply dry up and blow
away, and if we have to pay Sun a half-billion dollars in "damages" who
cares? The real "damage" is already done to our advantage and the
markets at stake are tens of billions per year.
Or my favorite -- when assessing and certifying competence on computers
in the state of North Carolina, students are tested on the use of an
integrated office suite. Which one(s)? Well, let's see. Schools have
the choice of Microsoft Office, Microsoft Works (even for -- and this is
not a joke -- DOS 2 or 3) or Apple Works (or again not a joke, Claris).
Hmmm. Apple has been driven to the edge of extinction several times and
has only been teased back from the brink by the invention of the ipod
and OSX (the latter allowing it to tap into the fast pool of OS software
and solving to some extent Apple's problems finding people outside of
Apple willing to develop for the platform). And Apple has a certain
appeal in elementary schools in the state, especially with the deals
Apple is willing to cut to remain in the market. Still, what does this
mean, practically speaking, given the cold hard reality of that 95%+ of
all BUSINESS desktops being Microsoft mentioned above? That the great
state of North Carolina metaphorically tests "driving" -- not of any old
vehicle -- but of a Ford, because if and when you graduate and go on to
work in business, you're gonna be driving a Ford.
Oh, you can use a late model Ford, a used Ford, or even one of those
antique Fords that still use handbrakes and are started with a little
handle up front, but a Ford it must be. And if not a Ford, we'll
tolerate an "artistic" American Motors, because after all it is modelled
upon the Ford and besides some of us still own stock in it or like the
garish colors of its sporty models. Don't even think about coming in to
pass your driving test in one of those "open source" autos, that somehow
auto-magically assemble themselves -- God knows if the gearshift even
works, and then don't run on the approved flavor of Water.
Thank you North Carolina (and many, many other states). Talk about
>>institutionalizing<< a monopoly by >>government mandate<< by training
our children to accept it as the natural state of affairs from their
earliest years...
This globe-spanning supermonopoly is a serious and ongoing threat to our
personal freedom. This is for a variety of reasons. For one, the
"water" that is being controlled is the fundamental means of processing
information, and we live in a society where information and its
processing is so tightly integrated with economic, governmental,
military, and research activities that the possibilities of abuse in
this arena are positively nightmarish (and are explored in various
movies and books that make this point). For another, the monopoly (like
all superpowerful orgainizations, criminal or otherwise) becomes a form
of "shadow government" -- collecting what resembles a tax far more than
a fee for service as an unavoidable cost of doing business, since there
is really no viable alternative to using water from their tightly
controlled and very expensive wells.
The supermonopoly can also directly impact political choice simply
because of its vast resources. Money has a huge effect on the success
of modern media-based political campaigns, and by directing even tiny
bits of its vast resources -- through completely legal means -- a
supermonopoly can have a disproportionate effect on political campaigns
and political decision making. We've seen how pervasive this sort of
thing can be in the case of e.g. the tobacco industry and its powerful
and well-funded lobby, that kept it more or less invulnerable to any
sort of rational regulation at the cost of HUNDREDS of millions of LIVES
worldwide over the DECADES from when the scientific evidence of
addiction, mobidity and mortality was completely overwhelming and beyond
any reasonable doubt. If we can't even act to preserve our lives
against the power and money of the tobacco lobby, who could expect us to
act to preserve something as ephemeral as our informational freedom in
the hands of a supermonopoly that doesn't need a "consortium" of
companies to create a lobby -- it IS the consortium?
Almost by definition, much of the influence exercised in this way is
"invisible" -- it can be uncovered only by means of nearly impossible
detective work, and then usually only surfaces during a scandal of some
sort where the usual protections of cronyism, "unremarkable" memberships
on the board of directors of seemingly disconnected companies, and
untraceable non-cash quid-pro-quo deals break down. Some of it IS
uncovered, but it turns out (unsurprisingly) that short of a smoking gun
or the crossing of an invisible line somewhere, nobody cares. So Tom
Delay goes down, perhaps there are connections there back to Microsoft,
perhaps not, but they are quickly explained or hushed and everybody goes
back to their business having seen "nothing".
Why is that? Well, for one thing in addition to holding a water
monopoly sort of control over competitors that makes it "impossible" for
a serious competitor for any given significant software product it takes
an interest in to emerge WITHIN the confines of its uniquely pervasive
desktop operating system, it gets to rely on a variety of aspects of
human nature to help it maintain a position where people don't CARE if
it maintains its monopoly, or even actively support it. They are
content, as it were, to accept the risk to their personal freedoms and
to pay the Microsoft tax as long as their own personal computing
environment remains familiar. Just as was the case for decades with
AT&T.
It is a sad fact that roughly 90% of all humans hate to have to learn
new things (a thing that I constantly struggle with as a teacher and
parent). Seriously. Sure, there are exceptions -- all people don't
mind learning some new things, some people would love to be able to
learn all new things, but all people do NOT want to learn all new things
and a significant class doesn't want to have to learn at all. As a
species, though we live in a perpetual state of what Alvin Toffler once
called "Future Shock" and we just aren't evolved for it. We especially
hate to have to learn new things (and maybe fail at it!) in order to
keep our jobs, in order to be able to do work we've already figured out
how to do "the old way". Learning is "expensive". It costs time and
money. There is also something mysterious about how it is an
>>unpleasant<< aspect of mental activity for most people -- we are
somehow evolved, one is almost forced to conclude, to >>avoid<< the
particular mental actions and states associated with structured
learning.
As a systems person I've seen this a million times over. Once a
secretary or office person has by virtue of necessity associated with
the means of making their living overcome all of the pain and invested
all of the time and "mastered" enough of e.g. Microsoft Office to be
able to do their job with it, they will NOT willingly change. Change
means threat, it means more work for them, it means an uncomfortable
period of uncertainty -- they will only willingly change if they are
de-facto threatened with dismissal if they fail to change and if they
are supported through the change, at which point they will become just
as adamently opposed to change away from the new product. [This isn't
just a factor that works in favor of Microsoft products -- for many
years the physics department used (the old toy) Macintoshes
administratively because our then chair was enamored of them. When a
new chair took over and decided to change away from this system to
Windows based PCs (this was an easy ten years ago and Linux wasn't even
a vaguely possible alternative at that point, and Sun workstations which
were were 2-3x more expensive) there was much pain and resistance and
suffering before the move was accomplished.]
Humans in this state become conservative and defensive about the
provider of the flavor of water they think that they need to survive,
unmolested by the need to change. They are in a curious way addicted,
trapped in their current way of doing business by many natural and
artificial/perceived barriers to change.
EVEN if many flavors of water were out there, they'd prefer a world with
only the one they are "used to" because they have a hard time coping
with change, with choice, with the "threat" associated with the
possibility that they might be required to learn a new tool that is
finally beyond their abilities to master or that lacks some feature that
they have grown accustomed to in their old toolset. Remember, computers
in particular are the leading edge, the very shockwave itself, of Future
Shock. Moore's Law more or less guarantees it. Five years is enough to
see a complete revolution, change that might have taken a lifetime to
see two hundred and fifty years ago compressed into two hundred and
fifty weeks.
Voice recognition is coming, so are universal convertible tablets, plus
changes as yet unknown, all of them scary, unsettling, expensive. Not
even industry pundits can predict what the world of computing will be
like five years from now with any real accuracy, and in ten years we
will probably be carrying around fully voice-driven wireless universal
interfaces to "the network" which at long last will indeed be "the
computer" -- and the media delivery channel, and the phone system, and
roughly 90% of our active memory and de facto usable intelligence. Or
something even more bizarre.
So sure, those humans are actually perfectly happy to worship the
Emperor and bless Him at meals, as it is by the Emperor's good graces
that food arrives on the table -- his water let's their crops of rice
grow and if fools start digging their own wells or diverting the rivers
of free water there will be war and chaos and "interesting times". It
is better to remain a peasant with rice on the table than to be brave
and perhaps watch one's children starve or to die at the hands of the
barbarians.
Finally, there is Microsoft and pension plans and the general stock
market. This is perhaps the scariest part of Microsoft's supermonopoly
status, one that a gentleman named Bill Parrish seems to have devoted
himself to uncovering and laying bare to an obviously uncaring world.
Microsoft stock is a rather huge component of stock owned by both
pension plans and individual "S&P Index" investors (and individuals) all
over the world. If Microsoft stock were to collapse, or even to slip
steadily down in nominal value, the economic consequences would be
catastrophic. It would make the collapse of Enron look tame by
comparison, because Microsoft is considerably larger at baseline than
Enron ever was. This creates a HUGE disincentive for individuals and
companies to challenge Microsoft's hydraulic legacy -- Microsoft has
essentially tied the future well being and wealth of an entire
generation of corporate employees and index fund investors to their own
continued success.
Who can doubt the political impact of this astounding fact (and feat)?
What president, what attorney general, would dare to tackle this
supergiant when by doing so he or she would damage the retirement
prospects of tens of millions of (voting) people? Even traditional
opponents of supermonopolies quail before the damage this would do to
the ordinary workers that are their constituents. Note that Microsoft
is nearly unique in their status here -- in most other industries a
gradual slippage gives the market time to adjust and reinvest in other
emerging and more profitable businesses in the same sector, including
those that are (in a healthy market economy) the ones that are putting
the hurt on the failing business.
However there ARE no other businesses poised to "become Microsoft", and
there is little sign that anybody really wants a mixed marketplace with
many choices (an argument that was used for years to justify the
perpetuation of AT&T, BTW, although after it was broken up it turned out
that the consumer just LOVED the explosion of competitive alternatives
for their phone service dollar and still are benefitting from them
today). Apple is still a joke as far as threats go, and could be
quashed more or less at will if it were in Microsoft's real interest to
do so -- they NEED at least one "visible" competitor to trumpet in their
period antitrust suits to help them advance the argument that they don't
need to be broken up like AT&T was, they're just strugging to keep their
head above water folks, really, competition could emerge >>any day
now<<. So sure, Linux makes steady inroads in the server market and
somehow managed to create a multibillion dollar cluster market all by
itself, other unices are holding their own or slipping a bit, but the
big market, the one that matters, are the hundreds of millions of
desktop computers, not the millions of servers that serve them (that are
STILL overwhelmingly Microsoft servers), and they all use Microsoft
water to grow Microsoft rice that has to be eaten with Microsoft
chopsticks from a Microsoft bowl (where other chopsticks tend to drop
valuable grains of rice, other bowls spill rice on the table) by an
overwhelming margin.
Even if (or rather when, in my opinion) Linux emerges as a viable threat
on the desktop, it will do so in a way that is disasterous for those
pension funds, because it will do so by DEFLATING the incredibly
INFLATED software market back to something approximating true value.
This isn't "just" a matter of Linux being basically free so that
software companies in this market are really service providers and not
software providers, eliminating the high margins of pure profit
associated with having dozens of products developed and maintained by
any ten or even hundred employees that are then resold onto a hundred
million or more desktops. Microsoft's P/E for years has been one of a
strong growth company and is in no way balanced as a generator of steady
revenues as an income stock. If (or rather, WHEN) its growth shows
signs of actually peaking, not just bobbling along with the market or
tapering off but actually deflating some with no obvious new markets to
exploit and no more headroom for growth, The P/E bubble will burst and
Microsoft could lose 1/3 to 2/3 of its value in a matter of a year, with
NO company emerging as a suitable reinvestment platform to replace the
money with matching stratospheric growth in the sector. A hundred
billion dollars will simply vanish from our economy like the paper it
is, dragging with it hundreds of billions more as the complex of debt
structures, pension investments, exchanges of services, and so on comes
crashing down.
Sure, we would survive this, just as we survived the S&L collapse that
caused a few hundred billion paper dollars to disappear, we survived the
dotcom collapse brought about by a lot of ongoing business practices
that inflate apparent value and preserve the illusion of endless growth,
we survived Enron, we survived Tyco, we survived MCI/Worldcom. However,
what politician wants to be seen as the one that triggers such a
collapse, even the collapse of a rotten, termite-ridden house when that
house shelters millions of voters? What businessman (or congressman) is
immune to the charm of continuing to buy into Microsoft's empire when
Microsoft's market position makes it so easy and besides, it would be
bad for their own pension plans and their own personal investment
portfolios to do otherwise?
In my opinion, the world is still coming to grips with emerging global
supermonopolies, with intellectual property seen now as a "natural
resource" to be created by individual minds, often with high risks, and
then taken over by corporate supergiants as their bread and butter
resource. Strong historical, political and economic forces conspire to
protect many of these supermonopolies because they often provide
services or goods that are "necessary" to the functioning of the global
economy. Also, they necessarily have as an essential part of their
superorganismal nature an urge to grow, to dominate markets, to quash
competition, to make more money for their shareholders and preserve the
power and intersts of their corporate leadership and employees. They
are indeed little shadow governments, and have interests that are not,
actually, the interests of the general public at heart.
They are opposed, ultimately, not by the forces of communism or
totalitarianism (either of which tend to simply "become" the hydraulic
empire anew under new management) but by the forces of a free society
with the right to regulate business practice and level playing fields
for the common good. The laws of our free society, however, change
slowly, very slowly compared to the rate at which supermonopolies have
emerged, and at no time have the lawmakers been free from the immense
influence wielded by those supermonopolies via the mechanisms outlined
above. As a consequence we must suffer each "surprising" collapse, each
"unethical" business practice that is revealed for the pyramid scheme or
shell game that it is when the peak of the pyramid is finally reached
and there is no longer any way to pay off the expectations of all of
those who invested in it.
So no, I don't hate Microsoft, any more than I hate Ford or hate Exxon
or hate Verizon or hate Enron. I fear Microsoft for the threat it
implies to my own personal political freedom, for the influence it has
had on the last couple of presidential and all ongoing congressional
elections (won, we must recall, by the thinnest of margins and usually
by the candidate with the deepest pockets), for the disaster I see
looming when it can no longer count on growing at a rate that justifies
its shareholders expectations as a "growth stock" and is left in a state
of eternal war to defend a slowly eroding income stream against the tiny
nibbling penguins that ultimately will only go away if Microsoft manages
to stake out some sort of unassailable intellectual property turf, and
for the significant problems I see associated with any company's IP
becoming a de facto standard for information storage and processing,
especially for the government.
So I forsee "interesting times" ahead on all fronts. As a Microsoft
employee, you can hardly state in print that you share any of these
concerns. You more or less have to defend the point of view that it is
simply great and wonderful that a single company controls such an
overwhelming share of the world's information technology industry (and
wealth -- more than a rather impressive list of COUNTRIES) because it is
YOUR company and YOU benefit directly from its success. You have to be
overjoyed to see that yet another possible high growth market will be
usurped and co-opted on behalf of your Emperor because it pays for the
rice that feeds your children and maintains a state of peace in the
Empire.
These are good times, for you. The barbarian penguins are far away and
weak -- it is easy in this time of plenty to feel the warm joy of a life
well lived and well ordered, where all of humanity worships the Emperor
and eats his the rice that the water that he controls makes possible,
even when it is the peasants themselves that actually grow the rice and
pump the water up from his wells with the strength of their backs. It
is even possible to learn from these upstart penguins, to observe how
they fight battles and use the profitable weapons they have discovered
back upon them, a strategy that has worked well so many times before.
It is not necessary, nor even desireable, to wipe them out, any more
than it would be a good thing to eliminate the loyal opposition, Apple.
The forms of democracy and "free-market" competition must be observed.
All that is needed is to ensure that no seed may be planted, no twisted
sapling take root, that might one day grow into a vast kudzu-like mass
that could challenge the Emperor, and so the Emperor's ministers remain
vigilant, guarding against these weeds that can grow without the
Emperor's water by crowding them out, buying them out, or planting right
next to them and lavishing such care as to ensure that they grow strong
while the challenger at best lives a blighted existence thereafter.
Perfection is not needed -- good enough is plenty when you rule the
entire world.
As a human being, though, you too must fear the Emperor. If he fails,
you will be among the first to starve. His weaknesses are your
weaknesses, and in our society there are always the Gods of Democracy
and Free Trade that stand even over the Emperor and can, with the stroke
of a pen, cast him down. There are always the warring demons of the
stock exchange, ever fickle, that can lose confidence in the strength of
the Emperor and overnight make you a pauper. There is the chance that
among the penguins will emerge a veritable Ghengis Khan who will overrun
the Empire with a might horde. To defend against these threats the
Emperor ever seeks to extend his Dominion over even these Gods and
Demons, to arrange matters so that no longer are his ministers and loyal
subjects threatened in this way but instead are protected, aye, are
become one with the Gods themselves. To have to eat the Emperor's rice
by law, to see it served in all of the schools, surely that is enough to
ensure the immortality of the Emperor and all who support him.
But never forget -- the barbarian penguins have one weapon, one tool,
that the Emperor can never embrace for it would unmake him, and cause
his mighty empire to unravel and turn to dust even as he sought to grasp
it. A tool stronger than the worst Khan of a penguin of sweaty
nightmares, a weapon greater than any other ever discovered. Everybody
on this list knows well what it is, and why that tool makes it
impossible, ultimately, to wipe out these pesky penguins UNLESS the
Emperor becomes a Dark God and can do so by fiat, unless the Empire is
indeed protected by force of law.
Do you?
rgb
--
Robert G. Brown http://www.phy.duke.edu/~rgb/
Duke University Dept. of Physics, Box 90305
Durham, N.C. 27708-0305
Phone: 1-919-660-2567 Fax: 919-660-2525 email:rgb at phy.duke.edu